Kenya's domestic debt has significantly increased in the third quarter of the fiscal year 2026, indicating a sustained reliance on local borrowing to finance government budget deficits.

• Domestic debt stock rose by Sh315.71 billion to Sh7.15 trillion in the three months to March 2026.
• The Central Bank of Kenya reported this faster accumulation compared to the previous year.
• This trend raises concerns among economists and lawmakers about potential crowding out of private sector credit, despite shifts towards managing external debt risks.